Palmer served as a Peace Corps volunteer in Liberia, West Africa from 1971 to 1973. He then worked as assistant director of financial aid at the University of Virginia in Charlottesville (1973–1974), and as a professor of history at Cuttington College in Suakoko, Liberia (1974–1976), and at Wake Forest University in Winston-Salem, North Carolina (1978–1981).

Palmer entered the U.S. Foreign Service in 1982. He served as vice consul in the Dominican Republic (1982–1984), and then as personnel officer in Montevideo, Uruguay, and Asuncion, Paraguay, from 1984 to 1986. He worked in the State Department as staff assistant to the Assistant Secretary for African Affairs from 1986–87 and then served as counselor for administration in Freetown, Sierra Leone from 1987 to 1989.[3]

In 1989, Palmer became a Pearson Fellow, serving as assistant to the president of the University of Texas at El Paso. His portfolio was advancing the North American Free Trade Agreement (NAFTA), creating faculty and student exchange opportunities in universities throughout Mexico, and serving as university consultant for International Affairs. At the end of two years as a Pearson Fellow, Palmer left to serve as personnel officer in Seoul, South Korea, (1991–1994), and later served as counselor for administration in the Dominican Republic (1994–1998).[3]

From 1998-1999, he attended the Senior Seminar. He arrived in Quito, Ecuador to begin a tour as Deputy Chief of Mission in August 1999. He finished his tour in Quito as Chargé d'Affaires In July 2002.

Palmer was sworn in as United States Ambassador to Honduras on September 9, 2002, by Secretary of State Colin Powell and delivered his credentials to the Honduran President Ricardo Maduro on October 9, 2002.[4] On June 28, 2010 President Obama nominated Palmer as United States Ambassador to Venezuela.[5] However, a start date as new ambassador to Venezuela wasn't announced.[6] On September 19, 2010, President Hugo Chávez announced on his weekly TV program that he would not allow Larry Palmer to take up his post in Caracas. Chávez's refusal is based on Palmer having recently told a US senator that morale in the Venezuelan army was low and that members of Chávez's government had ties to leftist Colombian rebels.[7] On December 28, 2010 Chavez defied the Obama administration's appointment of Palmer as ambassador to Venezuela and flatly refused him, accusing him of having made disrespectful remarks about Venezuela. In response, on December 29 the U.S. revoked the visa of Venezuela's ambassador, Bernardo Álvarez Herrera.[8]